Travis Perkins: Q1 2019 trading update - positive start to 2019 despite uncertain market conditions (808315)

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 Travis Perkins (TPK) 
Travis Perkins: Q1 2019 trading update - positive start to 2019 despite 
uncertain market conditions 
 
08-May-2019 / 07:00 GMT/BST 
Dissemination of a Regulatory Announcement that contains inside information 
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
08 May 2019 
 
Travis Perkins plc 
 
Q1 2019 trading update - positive start to 2019 despite uncertain market 
conditions 
 
Highlights 
 
  ? Positive start to 2019 with Group like-for-like sales growth of 7.3% and 
  total sales growth of 5.4% against a soft prior year comparative 
 
  ? Strong Merchanting like-for-like sales growth of 10.6% 
 
  ? Continued acceleration of Toolstation growth, with 25% total sales 
  growth 
 
  ? Good recovery in Wickes with 10.5% like-for-like sales growth 
 
  ? Given current uncertain market conditions and the early stage of the 
  year, overall expectations for 2019 remain unchanged 
 
       John Carter, Chief Executive, commented: 
 
    "We have delivered strong sales growth in the first quarter of the year, 
    which reflects both our focus on excellent customer service and the weak 
  comparator in 2018. This performance is all the more encouraging given the 
       impact of the on-going political uncertainty on our end markets. 
 
 The Merchanting businesses have maintained the strong growth trend from the 
    end of 2018, and Toolstation continues to grow extremely well, driven by 
   network expansion and existing stores maturing. Wickes posted encouraging 
sales growth figures in both core DIY and showroom categories, demonstrating 
      a strong turnaround in Kitchen and Bathroom performance. In Plumbing & 
      Heating the milder winter has impacted sales compared to 2018, but our 
 branches and specialist online channels have continued to perform well. The 
  work to operationally separate Plumbing and Heating is progressing to plan 
       and is expected to be completed in Q2. 
 
  The actions set out at our capital markets day in December 2018 to deliver 
 best in class service to trade customers and to simplify the Group are well 
      underway. We are making good progress on cost reduction activities and 
   expect to meet our cost reduction targets this year. Overall expectations 
       for the Group in 2019 remain unchanged." 
 
Q1 2019 sales Merchanting(1) Toolstation(2) Retail(2) Plumbing Group 
growth                                                   & 
                                                      Heating( 
                                                         1) 
Like-for-like     10.6%          19.1%        10.0%    (4.0)%   7.3% 
sales 
Net new space     (1.0)%          5.9%       (0.6)%    (3.4)%  (1.2)% 
and 
acquisitions 
Trading day       (0.9)%           -            -      (0.8)%  (0.7)% 
differences 
Total sales        8.7%          25.0%        9.4%     (8.2)%   5.4% 
Q1 2018           (0.5)%         10.6%       (7.9)%    19.7%    3.0% 
like-for-like 
(3) 
Two-year          10.0%          31.7%        1.3%     14.9%   10.5% 
like-for-like 
 
  All businesses within Merchanting demonstrated good growth. Travis Perkins 
  generated like-for-like sales growth of 8%, continuing the improving trend 
       from the end of 2018 and primarily driven by sales growth with larger 
 regional and national customers, and through the Managed Services business. 
      The strategy to further empower branch managers is well underway, with 
 experienced managers being supplied with greater access to information, the 
simplification of pricing systems and more customer focused support from the 
       central functions. 
 
   The specialist merchant businesses continue to drive strong like-for-like 
   sales growth, although the on-going political uncertainty poses a risk to 
      the outlook for the commercial construction and housebuilding markets. 
       Keyline continues to perform strongly through its targeted civils and 
drainage product categories, particularly through direct-to-site deliveries. 
   CCF continues to win market share through market-leading customer service 
  and relationship management, although growth is likely to moderate through 
      the year, partly due to product availability constraints in the supply 
 chain. BSS has maintained the good sales growth momentum from 2018, further 
  leveraging its clear market-leading position. In trade kitchens, Benchmarx 
   sales are growing well, with one additional branch opened in the quarter. 
 
    Toolstation continued its impressive like-for-like sales and total sales 
       growth, underpinned by the continued expansion of the store network, 
       alongside the launch of the new website at the end of 2018 and the 
   successful extension of online ranges which are helping to increase sales 
   density. We remain on track to open 60 new stores in the UK in 2019, with 
       encouraging progress in expanding the network in Europe. 
 
      Wickes had a strong performance in like-for-like sales and total sales 
 growth from both core DIY and the Kitchens and Bathroom showroom (K&B). K&B 
 benefited from a continued improvement in execution and a strong order book 
 carried over from 2018, partially aided by competitor decisions to exit the 
      design & install service for end-consumers in the second half of 2018. 
       Improved core DIY sales benefited from strong execution, but this was 
partially offset by the timing of Easter for Q1 (two days of Easter sales in 
       Q1 2018). 
 
 As expected, Plumbing & Heating experienced a slowdown in like-for-like and 
       total sales as the weather conditions were notably milder in Q1 2019 
 compared to 2018. Branch network and specialist online channels showed good 
      sales growth, which was offset by a decline in the wholesale business. 
 
The operational separation of the Plumbing & Heating business from the Group 
    is progressing to plan and is expected to be completed within the second 
 quarter. The Group remains on target to achieve its planned cost reductions 
     in 2019, with significant progress made towards removing the divisional 
    structure above the Merchanting businesses which will reduce complexity, 
       lower the above-branch cost base and speed up decision making. 
 
Enquiries 
 
Investor / analyst enquiries 
 
Graeme Barnes | [phone] | [e-mail] 
 
Zak Newmark | [phone] | [e-mail] 
 
Media enquiries 
 
David Allchurch | Tulchan Communications | [phone] 
 
       Footnotes 
 
1) Like-for-like sales growth for the three month period ended 31 March 
2019 compared to the three month period ended 31 March 2018 adjusted for 
the impact of extra one-half trading day in the 2018 period. Total sales 
growth for the three month period ended 31 March 2019 compared to the 
three month period ended 31 March 2018 not adjusted for the impact of 
extra one-half trading day in the 2018 period. 
 
2) Wickes like-for-like and total sales growth for the 13 week period 
ended 30 March 2019 compared to the 13 week period ended 31 March 2018. 
 
3) Q1 2018 like-for-like figures restated for the new Group segmental 
reporting structure, adopted from January 2019. 
 
ISIN:           GB0007739609 
Category Code:  QRF 
TIDM:           TPK 
LEI Code:       2138001I27OUBAF22K83 
OAM Categories: 3.1. Additional regulated information required to be 
                disclosed under the laws of a Member State 
Sequence No.:   8539 
EQS News ID:    808315 
 
End of Announcement EQS News Service 
 
 

(END) Dow Jones Newswires

May 09, 2019 17:08 ET (21:08 GMT)